EXHIBIT 10.19
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EXECUTION COPY
TELECORP PCS, INC
$575,000,000
11 5/8 Senior Subordinated Discount Notes due 2009
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
April 23, 1999
CHASE SECURITIES INC.
BT ALEX. XXXXX INCORPORATED
XXXXXX BROTHERS INC.
c/o Chase Securities Inc.
000 Xxxx Xxxxxx, 0xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
TeleCorp PCS, Inc., a Delaware corporation (the "Company"), proposes
to issue and sell to Chase Securities Inc. ("CSI"), BT Alex. Xxxxx Incorporated
and Xxxxxx Brothers Inc. (together with CSI, the "Initial Purchasers"), upon the
terms and subject to the conditions set forth in a purchase agreement dated
April 20, 1999 (the "Purchase Agreement"), $575,000,000 aggregate principal
amount at maturity of its 11 5/8 Senior Subordinated Discount Notes due 2009
(the "Securities") to be guaranteed on a senior subordinated basis by TeleCorp
Communications, Inc., a subsidiary of the Company (the "Subsidiary Guarantor").
Capitalized terms used but not defined herein shall have the meanings given to
such terms in the Purchase Agreement.
As an inducement to the Initial Purchasers to enter into the Purchase
Agreement and in satisfaction of a condition to the obligations of the Initial
Purchasers thereunder, the Company and the Subsidiary Guarantor agree with the
Initial Purchasers, for the benefit of the holders (including and the Market
Maker (as defined below)) of the Securities, the Exchange Securities (as defined
herein) and the Private Exchange Securities (as defined herein) (collectively,
the "Holders"), as follows:
1. Registered Exchange Offer. The Company and the Subsidiary
Guarantor shall (i) prepare and, not later than 60 days following the date of
original issuance of the Securities (the "Issue Date"), file with the Commission
a registration statement (the "Exchange Offer Registration Statement") on an
appropriate form under the Securities Act with respect to a proposed offer to
the Holders of the Securities (the "Registered Exchange Offer") who are not
prohibited by applicable law or interpretations thereof by the Commission's
staff from
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participating in the Registered Exchange Offer to issue and deliver
to such Holders, in exchange for the Securities, a like aggregate principal
amount of debt securities of the Company (the "Exchange Securities") that are
identical in all material respects to the Securities, except for the transfer
restrictions and registration rights relating to the Securities, (ii) use their
reasonable best efforts to cause the Exchange Offer Registration Statement to
become effective under the Securities Act no later than 180 days after the Issue
Date and the Registered Exchange Offer to be consummated no later than 210 days
after the Issue Date and (iii) keep the Exchange Offer Registration Statement
effective for not less than 30 days (or longer, if required by applicable law)
after the date on which notice of the Registered Exchange Offer is mailed to the
Holders (such period being called the "Exchange Offer Registration Period").
The Exchange Securities will be issued under the Indenture or an indenture (the
"Exchange Securities Indenture") among the Company, the Subsidiary Guarantor and
the Trustee or such other bank or trust company that is reasonably satisfactory
to the Initial Purchasers, as trustee (the "Exchange Securities Trustee"), such
indenture to be identical in all material respects to the Indenture, except for
the transfer restrictions and registration rights relating to the Securities (as
described above). All references in this Agreement to "Registration Statement"
and "prospectus" shall, except where the context otherwise requires, include any
Registration Statement (or amendment or supplement thereto) and prospectus (or
amendment thereto), respectively, filed with the Commission pursuant to Section
6 of this Agreement.
Upon the effectiveness of the Exchange Offer Registration Statement,
the Company shall promptly commence the Registered Exchange Offer, it being the
objective of such Registered Exchange Offer to enable each Holder electing to
exchange Securities for Exchange Securities (assuming that such Holder (a) is
not an affiliate of the Company or an Exchanging Dealer (as defined herein) not
complying with the requirements of the next sentence, (b) is not an Initial
Purchaser holding Securities that have, or that are reasonably likely to have,
the status of an unsold allotment in an initial distribution, (c) acquires the
Exchange Securities in the ordinary course of such Holder's business, (d) has no
arrangements or understandings with any person to participate in the
distribution of the Exchange Securities and (e) is not otherwise prohibited by
applicable law or interpretations thereof by the Commission's staff from
participating in the Registered Exchange Offer) and to trade such Exchange
Securities from and after their receipt without any limitations or restrictions
under the Securities Act and without material restrictions under the securities
laws of the several states of the United States. The Company, the Subsidiary
Guarantor, the Initial Purchasers and each Exchanging Dealer acknowledge that,
pursuant to current interpretations by the Commission's staff of Section 5 of
the Securities Act, (i) each Holder that is a broker-dealer electing to exchange
Securities, acquired for its own account as a result of market-making activities
or other trading activities, for Exchange Securities (an "Exchanging Dealer"),
is required to deliver a prospectus containing substantially the information set
forth in Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer
Procedures" section and the "Purpose of the Exchange Offer" section and in Annex
C hereto in the "Plan of Distribution" section of such prospectus in connection
with a sale of any such Exchange Securities received by such Exchanging Dealer
pursuant to the Registered Exchange Offer and (ii) if an Initial Purchaser
elects to sell Exchange Securities acquired in exchange for Securities
constituting any portion of an unsold allotment, such Initial Purchaser is
required to deliver a prospectus containing the information required by Item 507
and 508 of Regulation S-K under the Securities Act, as applicable, in connection
with such sale.
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If, prior to the consummation of the Registered Exchange Offer, any
Holder holds any Securities acquired by it that have, or that are reasonably
likely to be determined to have, the status of an unsold allotment in an initial
distribution, or any Holder is not entitled to participate in the Registered
Exchange Offer, the Company shall, upon the request of any such Holder,
simultaneously with the delivery of the Exchange Securities in the Registered
Exchange Offer, issue and deliver to any such Holder, in exchange for the
Securities held by such Holder (the "Private Exchange"), a like aggregate
principal amount of debt securities of the Company (the "Private Exchange
Securities") that are identical in all material respects to the Exchange
Securities, except for the transfer restrictions relating to such Private
Exchange Securities. The Private Exchange Securities will be issued under the
same indenture as the Exchange Securities, and the Company shall use
commercially reasonable best efforts to cause the Private Exchange Securities to
bear the same CUSIP number as the Exchange Securities.
In connection with the Registered Exchange Offer, the Company shall:
(a) mail to each Holder a copy of the prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(b) keep the Registered Exchange Offer open for not less than 30 days
(or longer, if required by applicable law) after the date on which notice
of the Registered Exchange Offer is mailed to the Holders;
(c) utilize the services of a depositary (which may be the Trustee or
an affiliate of the Trustee) for the Registered Exchange Offer with an
address in the Borough of Manhattan, The City of New York;
(d) permit Holders to withdraw tendered Securities at any time prior
to the close of business, New York City time, on the last business day on
which the Registered Exchange Offer shall remain open; and
(e) otherwise comply in all respects with all laws that are
applicable to the Registered Exchange Offer.
As soon as practicable after the close of the Registered Exchange
Offer and any Private Exchange, as the case may be, the Company shall:
(a) accept for exchange all Securities validly tendered and not
withdrawn pursuant to the Registered Exchange Offer and the Private
Exchange;
(b) deliver to the Trustee for cancelation all Securities so accepted
for exchange; and
(c) cause the Trustee or the Exchange Securities Trustee, as the case
may be, promptly to authenticate and deliver to each Holder, Exchange
Securities or Private Exchange Securities, as the case may be, equal in
principal amount to the Securities of such Holder so accepted for exchange.
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The Company shall use its reasonable best efforts to keep the Exchange
Offer Registration Statement effective and to amend and supplement the
prospectus contained therein in order to permit such prospectus to be used by
all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such persons must comply with such requirements
in order to resell the Exchange Securities; provided that (i) in the case where
such prospectus and any amendment or supplement thereto must be delivered by an
Exchanging Dealer, such period shall be the lesser of 180 days and the date on
which all Exchanging Dealers have sold all Exchange Securities held by them and
(ii) the Company shall make such prospectus and any amendment or supplement
thereto available to any broker-dealer for use in connection with any resale of
any Exchange Securities for a period of not less than 90 days after the
consummation of the Registered Exchange Offer.
The Indenture or the Exchange Securities Indenture, as the case may
be, shall provide that the Securities, the Exchange Securities and the Private
Exchange Securities shall vote and consent together on all matters as one class
and that none of the Securities, the Exchange Securities or the Private Exchange
Securities will have the right to vote or consent as a separate class on any
matter.
Interest on each Exchange Security and Private Exchange Security
issued pursuant to the Registered Exchange Offer and in the Private Exchange
will accrue from the last interest payment date on which interest was paid on
the Securities surrendered in exchange therefor or, if no interest has been paid
on the Securities, from the Issue Date.
Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Securities received by such Holder
will be acquired in the ordinary course of business, (ii) such Holder will have
no arrangements or understanding with any person to participate in the
distribution of the Securities or the Exchange Securities within the meaning of
the Securities Act, (iii) such Holder is not an affiliate of the Company or, if
it is such an affiliate, such Holder will comply with the registration and
prospectus delivery requirements of the Securities Act to the extent applicable,
(iv) if such Holder is not a broker-dealer, that it is not engaged in, and does
not intend to engage in, the distribution of the Exchange Securities and (v) if
such Holder is a broker-dealer, that it will receive Exchange Securities for its
own account in exchange for Securities that were acquired as a result of market-
making activities or other trading activities and that it will deliver a
prospectus in connection with any resale of such Exchange Securities.
Notwithstanding any other provisions hereof, the Company and the
Subsidiary Guarantor will ensure that (i) any Exchange Offer Registration
Statement and any amendment thereto and any prospectus forming part thereof and
any supplement thereto complies in all material respects with the Securities Act
and the rules and regulations of the Commission thereunder, (ii) any Exchange
Offer Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) any prospectus forming part of any Exchange
Offer Registration Statement, and any supplement to such prospectus, does not,
as of the consummation of the Registered
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Exchange Offer, include an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
2. Shelf Registration. If (i) because of any change in applicable
law or interpretations thereof by the Commission's staff the Company is not
permitted to effect the Registered Exchange Offer as contemplated by Section 1
hereof or (ii) any Securities validly tendered pursuant to the Registered
Exchange Offer are not exchanged for Exchange Securities within 210 days after
the Issue Date or (iii) any Initial Purchaser so requests with respect to
Securities or Private Exchange Securities not eligible to be exchanged for
Exchange Securities in the Registered Exchange Offer and held by it following
the consummation of the Registered Exchange Offer or (iv) any applicable law or
interpretations thereof by the Commission's staff do not permit any Holder to
participate in the Registered Exchange Offer or (v) any Holder that participates
in the Registered Exchange Offer does not receive freely transferable Exchange
Securities in exchange for tendered Securities or (vi) the Company so elects,
then the following provisions shall apply:
(a) the Company and the Subsidiary Guarantor shall use their
reasonable best efforts to file as promptly as practicable (but in no
event more than 45 days after so required or requested pursuant to
this Section 2) with the Commission, and thereafter shall use their
reasonable best efforts to cause to be declared effective, a shelf
registration statement on an appropriate form under the Securities Act
relating to the offer and sale of the Transfer Restricted Securities
(as defined below) by the Holders thereof from time to time in
accordance with the methods of distribution set forth in such
registration statement (hereafter, a "Shelf Registration Statement"
and, together with any Exchange Offer Registration Statement, a
"Registration Statement"); provided that no Holder (other than an
Initial Purchaser) shall be entitled to have the Securities held by it
covered by such Shelf Registration Statement unless such Holder agrees
in writing to be bound by all the provisions of this Agreement
applicable to such Holder.
(b) The Company and the Subsidiary Guarantor shall use their
reasonable best efforts to keep the Shelf Registration Statement
continuously effective in order to permit the prospectus forming part
thereof to be used by Holders of Transfer Restricted Securities for a
period ending on the earlier of (i) two years from the Issue Date or
such shorter period that will terminate when all the Transfer
Restricted Securities covered by the Shelf Registration Statement have
been sold pursuant thereto and (ii) the date on which the Securities
become eligible for resale without volume restrictions pursuant to
Rule 144 under the Securities Act (in any such case, such period being
called the "Shelf Registration Period"). The Company and the
Subsidiary Guarantor shall be deemed not to have used their reasonable
best efforts to keep the Shelf Registration Statement effective during
the requisite period if any of them voluntarily take any action that
would result in Holders of Transfer Restricted Securities covered
thereby not being able to offer and sell such Transfer Restricted
Securities during that period, unless (i) such action is required by
applicable law or (ii) such action is
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taken by the Company and the Subsidiary Guarantor in good faith and
for valid business reasons (not including avoidance of their
obligations hereunder), provided that the Company and the Subsidiary
Guarantor within 90 days thereafter comply with the requirements of
Section 4(j) hereof. Any such period during which the Company and the
Subsidiary Guarantor fail to keep the Shelf Registration Statement
effective and usable for offers and sales of Securities, Private
Exchange Securities and Exchange Securities is referred to as a
"Suspension Period". A Suspension Period shall commence on and include
the date the Company and the Subsidiary Guarantor give notice that the
Shelf Registration Statement is no longer effective or the prospectus
included therein is no longer usable for offers and sales of
Securities, Private Exchange Securities and Exchange Securities and
shall end on the date when each Holder of Securities, Private Exchange
Securities and Exchange Securities covered by such Shelf Registration
Statement either receives the copies of the supplemented or amended
prospectus contemplated by Section 4(j) hereof or is advised in
writing by the Company and the Subsidiary Guarantor that use of the
prospectus may be resumed. Not more than one Suspension Period shall
be permitted in any period of 360 consecutive days. If one or more
Suspension Periods occur, the two-year time period referenced above
shall be extended by the number of days included in each such
Suspension Period.
(c) Notwithstanding any other provisions hereof, the Company and
the Subsidiary Guarantor will ensure that (i) any Shelf Registration
Statement and any amendment thereto and any prospectus forming part
thereof and any supplement thereto complies in all material respects
with the Securities Act and the rules and regulations of the
Commission thereunder, (ii) any Shelf Registration Statement and any
amendment thereto (in either case, other than with respect to
information included therein in reliance upon or in conformity with
written information furnished to the Company by or on behalf of any
Holder specifically for use therein (the "Holders' Information")) does
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and (iii) any prospectus forming
part of any Shelf Registration Statement, and any supplement to such
prospectus (in either case, other than with respect to Holders'
Information), does not include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
3. Liquidated Damages. (a) The parties hereto agree that the
Holders of Transfer Restricted Securities will suffer damages if the Company and
the Subsidiary Guarantor fails to fulfill their obligations under Section 1 or
Section 2, as applicable, and that it would not be feasible to ascertain the
extent of such damages. Accordingly, if (i) the applicable Registration
Statement is not filed with the Commission on or prior to 60 days after the
Issue Date, (ii) the Exchange Offer Registration Statement or the Shelf
Registration Statement, as the case may be, is not declared effective within 180
days after the Issue Date (or in the case of a Shelf Registration Statement
required to be filed in response to a change in applicable law or
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interpretations thereof by the Commission's staff, if later, within 45 days
after publication of the change in law or interpretation), (iii) the Registered
Exchange Offer is not consummated on or prior to 210 days after the Issue Date,
or (iv) the Shelf Registration Statement is filed and declared effective within
180 days after the Issue Date (or in the case of a Shelf Registration Statement
required to be filed in response to a change in applicable law or
interpretations thereof by the Commission's staff, if later, within 45 days
after publication of the change in law or interpretation) but shall thereafter
cease to be effective (at any time that the Company is obligated to maintain the
effectiveness thereof) without being succeeded within 30 days by an additional
Registration Statement filed and declared effective (each such event referred to
in clauses (i) through (iv), a "Registration Default"), the Company and the
Subsidiary Guarantor will be jointly and severally obligated to pay liquidated
damages to each Holder of Transfer Restricted Securities, during the period of
one or more such Registration Defaults, in an amount equal to $ 0.192 per week
per $1,000 of Accreted Value (as defined in the Indenture) of Transfer
Restricted Securities held by such Holder until (i) the applicable Registration
Statement is filed, (ii) the Exchange Offer Registration Statement is declared
effective and the Registered Exchange Offer is consummated, (iii) the Shelf
Registration Statement is declared effective or (iv) the Shelf Registration
Statement again becomes effective, as the case may be. Following the cure of
all Registration Defaults, the accrual of liquidated damages will cease. As
used herein, the term "Transfer Restricted Securities" means (i) each Security
until the date on which such Security has been exchanged for a freely
transferable Exchange Security in the Registered Exchange Offer, (ii) each
Security or Private Exchange Security until the date on which it has been
effectively registered under the Securities Act and disposed of in accordance
with the Shelf Registration Statement or (iii) each Security or Private Exchange
Security until the date on which it is distributed to the public pursuant to
Rule 144 under the Securities Act or is saleable pursuant to Rule 144(k) under
the Securities Act. Notwithstanding anything to the contrary in this Section
3(a), the Company and the Subsidiary Guarantor shall not be required to pay
liquidated damages to a Holder of Transfer Restricted Securities if such Holder
failed to comply with its obligations to make the representations set forth in
the second to last paragraph of Section 1 or failed to provide the information
required to be provided by it, if any, pursuant to Section 4(n).
(b) The Company shall notify the Trustee and the Paying Agent under
the Indenture with three business day of the happening of each and every
Registration Default. The Company and the Subsidiary Guarantor shall pay
the liquidated damages due on the Transfer Restricted Securities by
depositing with the Paying Agent (which may not be the Company for these
purposes), in trust, for the benefit of the Holders thereof, prior to 10:00
a.m., New York City time, on the next interest payment date specified by
the Indenture and the Securities, sums sufficient to pay the liquidated
damages then due. The liquidated damages due shall be payable on each
interest payment date specified by the Indenture and the Securities to the
record holder entitled to receive the interest payment to be made on such
date. Each obligation to pay liquidated damages shall be deemed to accrue
from and including the date of the applicable Registration Default.
(c) The parties hereto agree that the liquidated damages provided for
in this Section 3 constitute a reasonable estimate of and are intended to
constitute the sole damages that will be suffered by Holders of Transfer
Restricted Securities by reason of
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the failure of (i) the Shelf Registration Statement or the Exchange Offer
Registration Statement to be filed, (ii) the Shelf Registration Statement
to remain effective or (iii) the Exchange Offer Registration Statement to
be declared effective and the Registered Exchange Offer to be consummated,
in each case to the extent required by this Agreement.
4. Registration Procedures. In connection with any Registration
Statement, the following provisions shall apply:
(a) The Company shall (i) furnish to each Initial Purchaser, prior to
the filing thereof with the Commission, a copy of the Registration
Statement and each amendment thereof and each supplement, if any, to the
prospectus included therein and shall, in its reasonable judgment, use its
reasonable best efforts to reflect in each such document, when so filed
with the Commission, such comments as any Initial Purchaser may reasonably
propose; (ii) include information substantially to the effect set forth in
Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer
Procedures" section and the "Purpose of the Exchange Offer" section and in
Annex C hereto in the "Plan of Distribution" section of the prospectus
forming a part of the Exchange Offer Registration Statement, and include
information substantially to the effect set forth in Annex D hereto in the
Letter of Transmittal delivered pursuant to the Registered Exchange Offer;
and (iii) if requested by any Initial Purchaser, include the information
required by Item 507 or 508 of Regulation S-K, as applicable, in the
prospectus forming a part of the Exchange Offer Registration Statement.
(b) The Company shall advise each Initial Purchaser, each Exchanging
Dealer and the Holders (if applicable) and, if requested by any such
person, confirm such advice in writing (which advice pursuant to clause
(ii) through (v) hereof shall be accompanied by an instruction to suspend
the use of the prospectus until the requisite changes have been made):
(i) when any Registration Statement and any amendment thereto
has been filed with the Commission and when such Registration
Statement or any post-effective amendment thereto has become
effective;
(ii) of any request by the Commission for amendments or
supplements to any Registration Statement or the prospectus included
therein or for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of any Registration Statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities, the
Exchange Securities or the Private Exchange Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose; and
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(v) of the happening of any event that requires the making of
any changes so that the Registration Statement and any amendment
thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading or any prospectus forming part of any Registration
Statement, and any supplement to such prospectus, does not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(c) If any event contemplated by clauses (ii) through (v) of Section
4 occurs during the period for which the Company and the Subsidiary
Guarantor are required to maintain an effective Registration Statement, the
Company and the Subsidiary Guarantor will as promptly as is practicable
prepare and file with the Commission a post-effective amendment to the
Registration Statement or a supplement to the related prospectus or file
any other required document so that, as thereafter delivered to purchasers
of the Securities, Exchange Securities or Private Exchange Securities from
a Holder, the prospectus will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(d) The Company and the Subsidiary Guarantor will use all reasonable
efforts to obtain the withdrawal at the earliest possible time of any order
suspending the effectiveness of any Registration Statement.
(e) The Company will furnish to each Holder of Transfer Restricted
Securities included within the coverage of any Shelf Registration
Statement, without charge, one conformed copy of such Shelf Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules and, if any such Holder so requests in writing,
all exhibits thereto (including those, if any, incorporated by reference)
and as many conformed copies of such Registration Statement as such Holder
reasonably requests.
(f) The Company will, during the Shelf Registration Period, promptly
deliver to each Holder of Transfer Restricted Securities included within
the coverage of any Shelf Registration Statement, without charge, as many
copies of the prospectus (including each preliminary prospectus) included
in such Shelf Registration Statement and any amendment or supplement
thereto as such Holder may reasonably request; and the Company and the
Subsidiary Guarantor consent to the use of such prospectus or any amendment
or supplement thereto by each of the selling Holders of Transfer Restricted
Securities in connection with the lawful offer and sale of the Transfer
Restricted Securities covered by such prospectus or any amendment or
supplement thereto.
(g) The Company will furnish to each Initial Purchaser and each
Exchanging Dealer, and to any other Holder who so requests, without charge,
one conformed copy of the Exchange Offer Registration Statement and any
post-effective amendment thereto, including financial statements and
schedules and, if any Initial Purchaser or Exchanging
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Dealer or any such Holder so requests in writing, all exhibits thereto
(including those, if any, incorporated by reference) and as many conformed
copies of such Exchange Offer Registration Statement as such Holder
reasonably requests.
(h) The Company will, during the Exchange Offer Registration Period
or the Shelf Registration Period, as applicable, promptly deliver to each
Initial Purchaser, each Exchanging Dealer and such other persons that are
required to deliver a prospectus following the Registered Exchange Offer,
without charge, as many copies of the final prospectus included in the
Exchange Offer Registration Statement or the Shelf Registration Statement
and any amendment or supplement thereto as such Initial Purchaser,
Exchanging Dealer or other persons may reasonably request; and the Company
and the Subsidiary Guarantor consent to the use of such prospectus or any
amendment or supplement thereto by any such Initial Purchaser, Exchanging
Dealer or other persons, as applicable, as aforesaid.
(i) Prior to the effective date of any Registration Statement, the
Company and the Subsidiary Guarantor will use commercially reasonable best
efforts to register or qualify, or cooperate with the Holders of
Securities, Exchange Securities or Private Exchange Securities included
therein and their respective counsel in connection with the registration or
qualification of, such Securities, Exchange Securities or Private Exchange
Securities for offer and sale under the securities or blue sky laws of such
jurisdictions as any such Holder reasonably requests in writing and do any
and all other acts or things necessary or advisable to enable the offer and
sale in such jurisdictions of the Securities, Exchange Securities or
Private Exchange Securities covered by such Registration Statement;
provided that the Company and the Subsidiary Guarantor will not be required
to qualify generally to do business in any jurisdiction where they are not
then so qualified or to take any action which would subject them to general
service of process or to taxation in any such jurisdiction where they are
not then so subject.
(j) The Company and the Subsidiary Guarantor will reasonably
cooperate with the Holders of Securities, Exchange Securities or Private
Exchange Securities to facilitate the timely preparation and delivery of
certificates representing Securities, Exchange Securities or Private
Exchange Securities to be sold pursuant to any Registration Statement free
of any restrictive legends and in such denominations and registered in such
names as the Holders thereof may request in writing prior to sales of
Securities, Exchange Securities or Private Exchange Securities pursuant to
such Registration Statement.
(k) If any event contemplated by Section 4(b)(ii) through (v) occurs
during the period for which the Company and the Subsidiary Guarantor are
required to maintain an effective Registration Statement, the Company and
the Subsidiary Guarantor will as promptly as is practicable prepare and
file with the Commission a post-effective amendment to the Registration
Statement or a supplement to the related prospectus or file any other
required document so that, as thereafter delivered to purchasers of the
Securities, Exchange Securities or Private Exchange Securities from a
Holder, the prospectus will not include an untrue statement of a material
fact or omit to state a
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material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
(l) Not later than the effective date of the applicable Registration
Statement, the Company will provide a CUSIP number for the Securities, the
Exchange Securities and the Private Exchange Securities, as the case may
be, and provide the applicable trustee with printed certificates for the
Securities, the Exchange Securities or the Private Exchange Securities, as
the case may be, in a form eligible for deposit with The Depository Trust
Company.
(m) The Company and the Subsidiary Guarantor will comply with all
applicable rules and regulations of the Commission and the Company will
make generally available to its security holders as soon as practicable
after the effective date of the applicable Registration Statement an
earning statement satisfying the provisions of Section 11(a) of the
Securities Act; provided that in no event shall such earning statement be
delivered later than 45 days after the end of a 12-month period (or 90
days, if such period is a fiscal year) beginning with the first month of
the Company's first fiscal quarter commencing after the effective date of
the applicable Registration Statement, which statement shall cover such 12-
month period.
(n) The Company and the Subsidiary Guarantor will cause the Indenture
or the Exchange Securities Indenture, as the case may be, to be qualified
under the Trust Indenture Act as required by applicable law in a timely
manner.
(o) The Company may require each Holder of Transfer Restricted
Securities to be registered pursuant to any Shelf Registration Statement to
furnish to the Company such information concerning the Holder and the
distribution of such Transfer Restricted Securities as the Company may from
time to time reasonably require for inclusion in such Shelf Registration
Statement, and the Company may exclude from such registration the Transfer
Restricted Securities of any Holder that fails to furnish such information
within a reasonable time after receiving such request.
(p) In the case of a Shelf Registration Statement, each Holder of
Transfer Restricted Securities to be registered pursuant thereto agrees by
acquisition of such Transfer Restricted Securities that, upon receipt of
any notice from the Company pursuant to Section 4(b)(ii) through (v), such
Holder will discontinue disposition of such Transfer Restricted Securities
until such Holder's receipt of copies of the supplemental or amended
prospectus contemplated by Section 4(j) or until advised in writing (the
"Advice") by the Company that the use of the applicable prospectus may be
resumed. If the Company shall give any notice under Section 4(b)(ii)
through (v) during the period that the Company is required to maintain an
effective Registration Statement (the "Effectiveness Period"), such
Effectiveness Period shall be extended by the number of days during such
period from and including the date of the giving of such notice to and
including the date when each seller of Transfer Restricted Securities
covered by such Registration Statement shall have received (x) the copies
of the supplemental or amended prospectus contemplated by Section 4(j) (if
an amended or supplemental
12
prospectus is required) or (y) the Advice (if no amended or supplemental
prospectus is required).
(q) In the case of a Shelf Registration Statement, the Company and
the Subsidiary Guarantor shall enter into such customary agreements
(including, if requested, an underwriting agreement in customary form and
reasonably acceptable to the Company) and take all such other action, if
any, as Holders of a majority in aggregate principal amount of the
Securities, Exchange Securities and Private Exchange Securities being sold
or the managing underwriters (if any) shall reasonably request in order to
facilitate any disposition of Securities, Exchange Securities or Private
Exchange Securities pursuant to such Shelf Registration Statement.
(r) In the case of a Shelf Registration Statement, the Company shall
(i) make reasonably available for inspection by a representative of, and
Special Counsel (as defined below) acting for, Holders of a majority in
aggregate principal amount of the Securities, Exchange Securities and
Private Exchange Securities being sold and any underwriter participating in
any disposition of Securities, Exchange Securities or Private Exchange
Securities pursuant to such Shelf Registration Statement, all relevant
financial and other records, pertinent corporate documents and properties
of the Company and its subsidiaries and (ii) use its reasonable best
efforts to have its officers, directors, employees, accountants and counsel
supply all relevant information reasonably requested by such
representative, Special Counsel or any such underwriter (an "Inspector") in
connection with such Shelf Registration Statement.
(s) In the case of a Shelf Registration Statement, the Company shall,
if requested by Holders of a majority in aggregate principal amount of the
Securities, Exchange Securities and Private Exchange Securities being sold,
their Special Counsel or the managing underwriters (if any) in connection
with such Shelf Registration Statement, use its reasonable best efforts to
cause (i) its counsel to deliver an opinion relating to the Shelf
Registration Statement and the Securities, Exchange Securities or Private
Exchange Securities, as applicable, substantially in the form delivered by
counsel for the Company in connection with the issuance and sale of the
Securities, (ii) its officers to execute and deliver all customary
documents and certificates requested by Holders of a majority in aggregate
principal amount of the Securities, Exchange Securities and Private
Exchange Securities being sold, their Special Counsel or the managing
underwriters (if any) and (iii) its independent public accountants to
provide a comfort letter or letters in customary form, subject to receipt
of appropriate documentation as contemplated, and only if permitted, by
Statement of Auditing Standards No. 72.
5. Registration Expenses. The Company and the Subsidiary Guarantor
will jointly and severally bear all expenses incurred in connection with the
performance of their obligations under Sections 1, 2, 3 and 4 and the Company
will reimburse the Initial Purchasers and the Holders for the reasonable fees
and disbursements of one firm of attorneys (in addition to any local counsel)
chosen by the Holders of a majority in aggregate principal amount of the
Securities, the Exchange Securities and the Private Exchange Securities to be
sold pursuant to
13
each Registration Statement (the "Special Counsel") acting for the Initial
Purchasers or Holders in connection therewith.
6. Market-Making. (a) For so long as any of the Securities,
Exchange Securities or Private Exchange Securities are outstanding and (i) Chase
Securities Inc. (the "Market Maker") or any of its affiliates owns any equity
securities of the Company and proposes to make a market in the Securities,
Exchange Securities or Private Exchange Securities as part of its business in
the ordinary course and (ii) in the judgment of the Market Maker or the Company,
applicable law requires the delivery of a prospectus in connection with such
market-making activities, the following provisions shall apply for the sole
benefit of the Market Maker:
(i) The Company and the Subsidiary Guarantor shall (A) on the
date that the Exchange Offer Registration Statement is filed with the
Commission, file a registration statement (the "Market-Making
Registration Statement") (which may be the Exchange Offer Registration
Statement or the Shelf Registration Statement if permitted by the
rules and regulations of the Commission) and use their reasonable best
efforts to cause such Market-Making Registration Statement to be
declared effective by the Commission on or prior to the consummation
of the Exchange Offer; (B) periodically amend such Market-Making
Registration Statement so that the information contained therein
complies with the requirements of Section 10(a) under the Securities
Act; (C) within 45 days following the end of each of the Company=s
fiscal quarters, file a supplement to the prospectus contained in the
Market-Making Registration Statement that sets forth the financial
results of the Company for such quarter; (D) amend the Market-Making
Registration Statement or supplement the related prospectus contained
therein when necessary to reflect any material changes in the
information provided therein; and (E) amend the Market-Making
Registration Statement when required to do so in order to comply with
Section 10(a)(3) of the Securities Act; provided, however, that (1)
-----------------
prior to filing the Market-Making Registration Statement, any
amendment thereto or any supplement to the prospectus contained
therein, the Company will furnish to the Market Maker copies of all
such documents proposed to be filed, which documents will be subject
to the review of the Market-Maker and its counsel, (2) the Company and
the Subsidiary Guarantor will not file the Market-Making Registration
Statement, any amendment thereto or any supplement to the prospectus
contained therein to which the Market-Maker and its counsel shall
reasonably object unless the Company is advised by counsel that such
Market-Making Registration Statement, amendment or supplement is
required to be filed in order to maintain the effectiveness of such
Market-Making Registration Statement and (3) the Company will provide
the Market Maker and its counsel with copies of the Market-Making
Registration Statement and each amendment and supplement filed.
(ii) Promptly upon the Company satisfying the eligibility
criteria for use of Form S-3 under the Securities Act, the Company and
the Subsidiary Guarantor shall file a post-effective amendment to the
Market-Making
14
Registration Statement to convert it from a Form S-1 to a Form S-3
registration statement.
(iii) The Company shall notify the Market-Maker, and, if
requested by the Market Maker, confirm such advice in writing, (A)
when any post-effective amendment to the Market-Making Registration
Statement or any amendment or supplement to the related prospectus has
been filed, and, with respect to any post-effective amendment, when
the same has become effective; (B) of any request by the Commission
for any post-effective amendment to the Market-Making Registration
Statement, any supplement or amendment to the related prospectus or
for additional information; (C) the issuance by the Commission of any
stop order suspending the effectiveness of the Market-Making
Registration Statement or the initiation of any proceedings for that
purpose; (D) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities for
sale in any jurisdiction or the initiation or threatening of any
proceedings for such purpose; (E) of the happening of any event that
causes (1) the Market-Making Registration Statement to contain an
untrue statement of a material fact or to omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading or (2) the prospectus contained in the Market
Making Registration Statement to contain an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; and (F) of any advice from a
nationally recognized statistical rating organization that such
organization has placed the Company under surveillance or review with
negative implications or has determined to downgrade the rating of the
Securities, Exchange Securities or Private Exchange Securities or any
other debt obligation of the Company whether or not such downgrade
shall have been publicly announced.
(iv) If any event contemplated by Section 6(a)(iii)(B) through
(E) occurs during the period for which the Company and the Subsidiary
Guarantor are required to maintain an effective Market-Making
Registration Statement, the Company and the Subsidiary Guarantor shall
promptly prepare and file with the Commission a post-effective
amendment to the Market-Making Registration Statement or a supplement
to the related prospectus or file any other required document so that
the prospectus will not include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(v) In the event of the issuance of any stop order suspending
the effectiveness of the Market-Making Registration Statement or of
any order suspending the qualification of the Securities, Exchange
Securities or Private Exchange Securities for sale in any
jurisdiction, the Company and the Subsidiary Guarantor shall use their
reasonable best efforts to obtain its withdrawal promptly.
15
(vi) The Company shall furnish to the Market Maker, without
charge, (A) at least one conformed copy of the Market-Making
Registration Statement and any post-effective amendment thereto and
(B) as many copies of the related prospectus and any amendment or
supplement thereto as the Market Maker may reasonably request.
(vii) The Company and the Subsidiary Guarantor shall consent to
the use of the prospectus contained in the Market-Making Registration
Statement or any amendment or supplement thereto by the Market Maker
in connection with the lawful offering and sale of the Securities,
Exchange Securities or Private Exchange Securities.
(viii)For so long as the Securities, Exchange Securities or
Private Exchange Securities shall be outstanding, the Company shall
furnish to the Market Maker (A) as soon as practicable after the end
of each of the Company's fiscal years, the number of copies reasonably
requested by the Market Maker of the Company's annual report for such
year, if such report is distributed to the stockholders of the
Company, (B) as soon as available, the number of copies reasonably
requested by the Market Maker of each report (including, without
limitation, reports on Forms 10-K, 10-Q and 8-K) or definitive proxy
statements (if any) of the Company filed under the Exchange Act or
mailed to stockholders and (C) any public reports and all reports and
financial statements furnished by the Company to the Nasdaq National
Market System or any U.S. national securities exchange or quotation
service upon which the Securities or Exchange Securities may be listed
pursuant to requirements of or agreements with such exchange or
quotation service or to the Commission pursuant to the Exchange Act or
any rule or regulation of the Commission thereunder.
(b) In the case of the Market-Making Registration Statement, the
Market Maker agrees that, upon receipt of any notice from the Company
pursuant to clauses (B) through (E) of paragraph 6(a)(iii), the Market
Maker will discontinue disposition of such Securities, Exchange Securities
or Private Exchange Securities until the Market Maker's receipt of copies
of the supplemental or amended prospectus contemplated by Section 6(a)(iv)
or until advised in writing by the Company that the use of the applicable
prospectus may be resumed.
(c) Prior to the effective date of the Market-Making Registration
Statement, the Company and the Subsidiary Guarantor will use commercially
reasonable efforts to register or qualify, or cooperate with the Market
Maker and its respective counsel in connection with the registration or
qualification of, such Securities, Exchange Securities or Private Exchange
Securities for offer and sale under the securities or blue sky laws of such
jurisdictions as the Market Maker reasonably requests in writing and do any
and all other acts or things necessary or advisable to enable the offer and
sale in such jurisdictions of the Securities, Exchange Securities or
Private Exchange Securities covered by the Market-Making Registration
Statement; provided that the Company and the Subsidiary Guarantor will not
be required to qualify generally to do business in any
16
jurisdiction where they are not then so qualified or to take any action
which would subject them to general service of process or to taxation in
any such jurisdiction where they are not then so subject.
(d) The Company and the Subsidiary Guarantor represent that the
Market-Making Registration Statement, any post-effective amendments
thereto, any amendments or supplements to the related prospectus and any
documents filed by them under the Exchange Act will, when they become
effective or are filed with the Commission, as the case may be, conform in
all respects to the requirements of the Securities Act and the Exchange Act
and the rules and regulations of the Commission thereunder and will not, as
of the effective date of such Market-Making Registration Statement or post-
effective amendments and as of the filing date of amendments or supplements
to such prospectus or filings under the Exchange Act, contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided that no representation or warranty is made as to
information contained in or omitted from the Market-Making Registration
Statement or the related prospectus in reliance upon and in conformity with
written information furnished to the Company by the Market Maker
specifically for inclusion therein, which information the parties hereto
agree will be limited to the statements concerning the market-making
activities of the Market Maker to be set forth on the cover page and in the
"Plan of Distribution" section of the prospectus (the "Market Maker's
Information").
(e) At the time of effectiveness of the Market-Making Registration
Statement and concurrently with each time the Market-Making Registration
Statement or the related prospectus shall be amended or such prospectus
shall be supplemented, the Company shall (if reasonably requested by the
Market Maker) furnish the Market Maker and its counsel with a certificate
of its Chief Executive Officer and its Executive Vice President and Chief
Financial Officer to the effect that:
(i) the Market-Making Registration Statement has been declared
effective;
(ii) in the case of an amendment or supplement, such amendment
has become effective under the Securities Act as of the date and time
specified in such certificate, if applicable, such amendment or
supplement to the prospectus was filed with the Commission pursuant to
the subparagraph of Rule 424(b) under the Securities Act specified in
such certificate on the date specified therein;
(iii) to the knowledge of such officers, no stop order
suspending the effectiveness of the Market-Making Registration
Statement has been issued and no proceeding for that purpose is
pending or threatened by the Commission; and
(iv) such officers have carefully examined (A) the Market-Making
Registration Statement and, in the case of an amendment, such
amendment, and as of the date of such Market-Making Registration
Statement or amendment, as
17
applicable, the Market-Making Registration Statement, as amended, if
applicable, did not include any untrue statement of a material fact
and did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and
(B) the related prospectus, and, in the case of a supplement, such
supplement, and as of the date of such prospectus or supplement, as
applicable, such prospectus, as supplemented, if applicable, did not
include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
(f) At the time of effectiveness of the Market-Making Registration
Statement and concurrently with each time the Market-Making Registration
Statement or the related prospectus shall be amended or such prospectus
shall be supplemented, the Company shall (if requested by the Market Maker)
furnish the Market Maker and its counsel with the written opinion of
counsel for the Company satisfactory to the Market Maker to the effect
that:
(i) the Market-Making Registration Statement has been declared
effective;
(ii) in the case of an amendment or supplement, such amendment
has become effective under the Securities Act as of the date and time
specified in such opinion and such amendment or supplement to the
prospectus was filed with the Commission pursuant to the subparagraph
of Rule 424(b) under the Securities Act specified in such opinion on
the date specified therein;
(iii) to the knowledge of such counsel, no stop order suspending
the effectiveness of the Market-Making Registration Statement has been
issued and no proceeding for that purpose is pending or threatened by
the Commission; and
(iv) such counsel has participated in conferences with officers
of the Company and independent public accountants for the Company at
which the contents of such Market-Making Registration Statement and
prospectus (and, in the case of an amendment or supplement, such
amendment or supplement) and related matters were discussed and has no
reason to believe that as of the date of such Market-Making
Registration Statement, amendment or supplement, as applicable, the
Market-Making Registration Statement and the prospectus, as amended or
supplemented, if applicable, contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading.
(g) At the time of effectiveness of the Market-Making Registration
Statement and concurrently with each time the Market-Making Registration
Statement or the related prospectus shall be amended or such prospectus
shall be supplemented to include audited annual financial information, the
Company shall (if requested by the Market Maker) furnish the Market-Maker
and its counsel with a letter of PricewaterhouseCoopers LLP (or other
independent public accountants for the Company of nationally recognized
standing), in form satisfactory to the Market-Maker, addressed
18
to the Market-Maker and dated the date of delivery of such letter, (i)
confirming that they are independent public accountants within the meaning
of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01
of Regulation S-X of the Commission and, (ii) in all other respects,
substantially in the form of the letter delivered to the Initial Purchasers
pursuant to Section 5(f) of the Purchase Agreement, with, in the case of an
amendment or supplement to include audited financial information, such
changes as may be necessary to reflect the amended or supplemented
financial information.
(h) The Company hereby agrees to indemnify the Market Maker, and, if
applicable, contribute to the Market Maker, in accordance with Sections 7
and 8 of this Agreement.
(i) The Company will comply with the provisions of this Section 6 at
its own expense and will reimburse the Market Maker for its expenses
associated with this Section 6 (including reasonable fees and expenses of
counsel).
(j) The agreements contained in this Section 6 and the
representations, warranties and agreements contained in this Agreement
shall survive all offers and sales of the Securities and shall remain in
full force and effect, regardless of any termination or cancelation of this
Agreement or any investigation made by or on behalf of any indemnified
party.
(k) For purposes of this Section 6, any reference to the terms
"amend", "amendment" or "supplement" with respect to the Market-Making
Registration Statement or the prospectus contained therein shall be deemed
to refer to and include the filing under the Exchange Act of any document
deemed to be incorporated therein by reference.
7. Indemnification. (a) In the event of a Shelf Registration
Statement or in connection with any prospectus delivery pursuant to an Exchange
Offer Registration Statement by an Initial Purchaser or Exchanging Dealer, as
applicable, or in connection with any prospectus delivery by the Market Maker,
the Company and the Subsidiary Guarantor shall jointly and severally indemnify
and hold harmless each Holder (including, without limitation, any such Initial
Purchaser or Exchanging Dealer or the Market Maker), its affiliates, their
respective officers, directors, employees, representatives and agents, and each
person, if any, who controls such Holder within the meaning of the Securities
Act or the Exchange Act (collectively referred to for purposes of this Section 7
and Section 8 as a Holder) from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including,
without limitation, any loss, claim, damage, liability or action relating to
purchases and sales of Securities, Exchange Securities or Private Exchange
Securities), to which that Holder may become subject, whether commenced or
threatened, under the Securities Act, the Exchange Act, any other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact contained in
any such Registration Statement or Market-Making Registration Statement or any
prospectus forming part thereof or in any amendment or supplement thereto, (ii)
the omission or alleged omission to state therein a
19
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading or (iii) in the case of the Market Maker, any breach by the
Company of its representations, warranties and agreements set forth in Section
6, and shall reimburse each Holder promptly upon demand for any legal or other
expenses reasonably incurred by that Holder in connection with investigating or
defending or preparing to defend against or appearing as a third party witness
in connection with any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company and the Subsidiary
Guarantor shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of, or is based upon, an untrue
statement or alleged untrue statement in, or omission or alleged omission from,
any of such documents in reliance upon and in conformity with any Holders'
Information or Market Maker's Information; and provided, further that with
respect to any such untrue statement in or omission from any related preliminary
prospectus, the indemnity agreement contained in this Section 7(a) shall not
inure to the benefit of any Holder from whom the person asserting any such loss,
claim, damage, liability or action received Securities, Exchange Securities or
Private Exchange Securities to the extent that such loss, claim, damage,
liability or action of or with respect to such Holder results from the fact that
both (i) a copy of the final prospectus was not sent or given to such person at
or prior to the written confirmation of the sale of such Securities, Exchange
Securities or Private Exchange Securities to such person and (ii) the untrue
statement in or omission from the related preliminary prospectus was corrected
in the final prospectus unless, in either case, such failure to deliver the
final prospectus was a result of non-compliance by the Company with Section
4(e), 4(f), 4(g) or 4(h) or Section 6, as applicable.
(b) In the event of a Shelf Registration Statement or in connection
with any prospectus delivery by the Market Maker, each Holder (including, if
applicable, the Market Maker) shall indemnify and hold harmless the Company, its
affiliates, their respective officers, directors, employees, representatives and
agents, and each person, if any, who controls the Company within the meaning of
the Securities Act or the Exchange Act (collectively referred to for purposes of
this Section 7(b) and Section 8 as the Company), from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Company may become subject, whether commenced or threatened, under
the Securities Act, the Exchange Act, any other federal or state statutory law
or regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any such Registration
Statement or Market-Making Registration Statement or any prospectus forming part
thereof or in any amendment or supplement thereto or (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with any
Holders' Information or Market Maker's Information furnished to the Company by
such Holder, and shall reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
or preparing to defend against or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that no such Holder shall be liable
for any indemnity claims hereunder in excess of the amount of net proceeds
received by such Holder
20
from the sale of Securities, Exchange Securities or Private Exchange Securities
pursuant to such Shelf Registration Statement or prospectus.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 7(a) or 7(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 7 except to the extent
that it has been prejudiced (through the forfeiture of substantive rights or
defenses) by such failure; and provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 7. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than the reasonable costs of investigation; provided, however,
that an indemnified party shall have the right to employ its own counsel in any
such action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (i)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (ii) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party,
(iii) a conflict or potential conflict exists (based upon advice of counsel to
the indemnified party) between the indemnified party and the indemnifying party
(in which case the indemnifying party will not have the right to direct the
defense of such action on behalf of the indemnified party) or (iv) the
indemnifying party has not in fact employed counsel reasonably satisfactory to
the indemnified party to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party or
parties. Each indemnified party, as a condition of the indemnity agreements
contained in Sections 7(a) and 7(b), shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party (which
consent shall not be unreasonably withheld), effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have
21
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
8. Contribution. If the indemnification provided for in Section 7 is
unavailable or insufficient to hold harmless an indemnified party under Section
7(a) or 7(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company and the Subsidiary Guarantor from the initial
offering and sale of the Securities, on the one hand, and by a Holder from
receiving Securities, Exchange Securities or Private Exchange Securities, as
applicable, registered under the Securities Act, on the other, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Subsidiary Guarantor, on the one hand, and such Holder, on the other, with
respect to the statements or omissions that resulted in such loss, claim, damage
or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to the Company and the Subsidiary Guarantor or information supplied by
the Company and the Subsidiary Guarantor, on the one hand, or to any Holders,
Information or Market Maker's Information supplied by such Holder, on the other,
the intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
parties hereto agree that it would not be just and equitable if contributions
pursuant to this Section 8 were to be determined by pro rata allocation or by
any other method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 8 shall be deemed to include, for
purposes of this Section 8, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending or
preparing to defend any such action or claim. Notwithstanding the provisions of
this Section 8, an indemnifying party that is a Holder of Securities, Exchange
Securities or Private Exchange Securities shall not be required to contribute
any amount in excess of the amount by which the total price at which the
Securities, Exchange Securities or Private Exchange Securities sold by such
indemnifying party to any purchaser exceeds the amount of any damages which such
indemnifying party has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
9. Rules 144 and 144A. The Company shall use its reasonable best
efforts to file the reports required to be filed by it under the Securities Act
and the Exchange Act in a timely manner and, if at any time the Company is not
required to file such reports, it will, upon the written request of any Holder
of Transfer Restricted Securities or the Market Maker, make publicly available
other information so long as necessary to permit sales of such Holder's or the
Market Maker's securities pursuant to Rules 144 and 144A. The Company and the
Subsidiary Guarantor covenant that they will take such further action as any
Holder of Transfer Restricted
22
Securities or the Market Maker may reasonably request, all to the extent
required from time to time to enable such Holder or the Market Maker to sell
Transfer Restricted Securities without registration under the Securities Act
within the limitation of the exemptions provided by Rules 144 and 144A
(including, without limitation, the requirements of Rule 144A(d)(4)). Upon the
written request of any Holder of Transfer Restricted Securities or the Market
Maker, the Company and the Subsidiary Guarantor shall deliver to such Holder or
the Market Maker, as applicable, a written statement as to whether they have
complied with such requirements. Notwithstanding the foregoing, nothing in this
Section 8 shall be deemed to require the Company to register any of its
securities pursuant to the Exchange Act.
10. Underwritten Registrations. If any of the Transfer Restricted
Securities covered by any Shelf Registration Statement are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be selected by the Holders of
a majority in aggregate principal amount of such Transfer Restricted Securities
included in such offering, subject to the consent of the Company (which shall
not be unreasonably withheld or delayed), and such Holders shall be responsible
for all underwriting commissions and discounts in connection therewith.
No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
11. Miscellaneous. (a) Amendments and Waivers. No failure or delay
by the Company, the Subsidiary Guarantor, any Holder or the Market Maker in
exercising any right under this Agreement shall operate as a waiver thereof nor
shall any single or partial exercise of any such right or amendment or
discontinuance of steps to enforce any such right preclude any other of further
exercise thereof or the exercise of any other right. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the Company
has obtained the written consent of Holders of a majority in aggregate principal
amount of the Securities, the Exchange Securities and the Private Exchange
Securities, taken as a single class (and, with respect to the provisions of
Section 6, the written consent of the Market Maker). Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of Holders whose Securities,
Exchange Securities or Private Exchange Securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the
rights of other Holders may be given by Holders of a majority in aggregate
principal amount of the Securities, the Exchange Securities and the Private
Exchange Securities being sold by such Holders pursuant to such Registration
Statement.
(b) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier or air courier guaranteeing next-day delivery:
23
(1) if to a Holder, at the most current address given by such Holder
to the Company in accordance with the provisions of this Section 11(b),
which address initially is, with respect to each Holder, the address of
such Holder maintained by the Registrar under the Indenture, with a copy in
like manner to Chase Securities Inc., BT Alex. Xxxxx Incorporated and
Xxxxxx Brothers Inc.;
(2) if to an Initial Purchaser, initially at its address set forth in
the Purchase Agreement; and
(3) if to the Company, initially at the address of the Company set
forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; one business day after
being delivered to a next-day air courier; five business days after being
deposited in the mail; and when receipt is acknowledged by the recipient's
telecopier machine, if sent by telecopier.
(c) Successors And Assigns. This Agreement shall be binding upon the
Company and its successors and assigns.
(d) Counterparts. This Agreement may be executed in any number of
counterparts (which may be delivered in original form or by telecopier) and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(e) Definition of Terms. For purposes of this Agreement, (a) the
term "business day" means any day on which the New York Stock Exchange, Inc. is
open for trading, (b) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act and (c) except where otherwise expressly provided,
the term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(h) Remedies. In the event of a breach by the Company, any
Subsidiary Guarantor or by any Holder of any of their obligations under this
Agreement, each Holder, the Company or any Subsidiary Guarantor, as the case may
be, in addition to being entitled to exercise all rights granted by law,
including recovery of damages (other than the recovery of damages for a breach
by the Company or any Subsidiary Guarantor of its obligations under Sections 1
or 2 hereof for which liquidated damages have been paid pursuant to Section 3
hereof), will be entitled to specific performance of its rights under this
Agreement. The Company, the Subsidiary Guarantor and each Holder agree that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by each such person of any of
24
the provisions of this Agreement and hereby further agree that, in the event of
any action for specific performance in respect of such breach, each such person
shall waive the defense that a remedy at law would be adequate.
(i) No Inconsistent Agreements. The Company and each Subsidiary
Guarantor represents, warrants and agrees that (i) it has not entered into,
shall not, on or after the date of this Agreement, enter into any agreement that
is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof, (ii) it has not previously
entered into any agreement which remains in effect granting any registration
rights with respect to any of its debt securities to any person and (iii) (with
respect to the Company) without limiting the generality of the foregoing,
without the written consent of the Holders of a majority in aggregate principal
amount of the then outstanding Transfer Restricted Securities and the Market
Maker, it shall not grant to any person the right to request the Company to
register any debt securities of the Company under the Securities Act unless the
rights so granted are not in conflict or inconsistent with the provisions of
this Agreement.
(j) No Piggyback on Registrations. Neither the Company nor any of
its security holders (other than the Holders of Transfer Restricted Securities
in such capacity) shall have the right to include any securities of the Company
in any Shelf Registration or Registered Exchange Offer other than Transfer
Restricted Securities.
(k) Severability. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
25
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Subsidiary Guarantor and the Initial Purchasers.
Very truly yours,
TELECORP PCS, INC.,
by /s/ Xxxxxx X. Xxxxxxxx
_____________________________________
Name: Xxxxxx X. Xxxxxxxx
Title: Executive Vice President
and Chief Financial Officer
TELECORP COMMUNICATIONS, INC.,
by /s/ Xxxxxx X. Xxxxxxxx
_____________________________________
Name: Xxxxxx X. Xxxxxxxx
Title: President, Treasurer and Secretary
Accepted:
CHASE SECURITIES INC.,
by /s/ R. Xxxxx XxXxxxxxx
_______________________________
Authorized Signatory
BT ALEX. XXXXX INCORPORATED,
by /s/ Xxxxxx Xxxxxxx
_______________________________
Authorized Signatory
26
XXXXXX BROTHERS INC.,
by /s/ Xxxx Xxxxxx
________________________________
Authorized Signatory
ANNEX A
Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Registered Exchange Offer must acknowledge that it will deliver
a prospectus in connection with any resale of such Exchange Securities. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of Exchange Securities received in exchange for
Securities where such Securities were acquired by such broker-dealer as a result
of market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after the Expiration Date (as defined herein), it
will make this Prospectus available to any broker-dealer for use in connection
with any such resale. See "Plan of Distribution".
ANNEX B
Each broker-dealer that receives Exchange Securities for its own account in
exchange for Securities, where such Securities were acquired by such broker-
dealer as a result of market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Securities. See "Plan of Distribution".
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Registered Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Securities.
This Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of Exchange Securities
received in exchange for Securities where such Securities were acquired as a
result of market-making activities or other trading activities. The Company has
agreed that, for a period of 180 days after the Expiration Date, it will make
this prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale. In addition, until July 22, 1999, all
dealers effecting transactions in the Exchange Securities may be required to
deliver a prospectus.
The Company will not receive any proceeds from any sale of Exchange
Securities by broker-dealers. Exchange Securities received by broker-dealers
for their own account pursuant to the Registered Exchange Offer may be sold from
time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange
Securities or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or at negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer or the
purchasers of any such Exchange Securities. Any broker-dealer that resells
Exchange Securities that were received by it for its own account pursuant to the
Registered Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Securities may be deemed to be an "underwriter"
within the meaning of the Securities Act and any profit on any such resale of
Exchange Securities and any commission or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The Letter of Transmittal states that, by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Registered Exchange Offer (including the expenses of one counsel
for the Holders of the Securities) other than commissions or concessions of any
broker-dealers and will indemnify the Holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
ANNEX D
[_] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
Address:
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Securities that were acquired as
a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
